SASAC made clear the “double carbon” goal of central enterprises. The document issued by SASAC mentioned that in order to accelerate the green and low-carbon transformation and high-quality development of central enterprises and support the country to achieve the dual carbon goal on schedule, it is necessary to establish a green and low-carbon circular industry system and accelerate the development of a new generation of strategic emerging industries. By 2025, the comprehensive energy consumption of 10000 yuan output value of central enterprises will be 15% lower than that in 2020, the carbon dioxide emission of 10000 yuan output value will be 18% lower than that in 2020, the installed proportion of renewable energy power generation will reach more than 50%, and the revenue proportion of strategic emerging industries will not be less than 30%, laying a solid foundation for achieving carbon peak. In this context, renewable resource service providers and power operators are expected to benefit fully.
The cost end prices of cement and glass decreased and the profitability of the industry increased. Due to obvious cooling, shutdown occurred in many regions, and the demand of cement market decreased significantly. The downward demand led to the decline of cement price. With the recent decline in coal prices, the cement coal price difference increased month on month, the profitability of the industry increased month on month, and the year-on-year increase expanded. We believe that the cement market demand is still at a low level in the short term, but with the recovery of infrastructure investment and the promotion of major project construction in 2022, the cement market demand will pick up. It is suggested to pay attention to the leading enterprises in the cement region.
At the end of the year, the demand contracted, the steel price continued to weaken, and the gross profit per ton of steel began to decline. This week, the steel price decreased slightly, the demand contraction superimposed on the supply recovery led to the pressure on the steel price, and the gross profit per ton of steel decreased month on month under the strong cost line. In terms of supply, the output of large varieties of steel increased month on month on Friday, and the core production limited areas of Beijing, Tianjin and Hebei began to prepare for resumption of production and promote the recovery of output. The demand continues to shrink, the demand of downstream construction sites gradually ends at the end of the year, the contraction of building materials is obvious, and the plate is basically stable. The inventory was stable, the inventory of building materials increased and the inventory of plates decreased. On the raw material side, China’s iron ore strengthened, imported ore rebounded weakly, the coke market operated stably, and scrap steel fell slightly.
Long term logic, coal supply constraints are still. The bottleneck of supply growth is obvious, the enthusiasm of coal enterprises to invest in new mines is weak, the economy is poor, the construction cycle of new production capacity is long and the approval procedures are complicated, which restrict the growth of coal production capacity. The double carbon background determines that the coal supply will remain stable, and Sanxi and Xinjiang with excellent resource endowment will be strong. At the same time, The stability of coal price is very important to the healthy development of the whole industry. The periodicity of the industry is weakened and the profit stability is enhanced. The cash flow situation of coal enterprises in recent years has also laid a solid foundation for some coal enterprises to develop in depth into new energy, new materials and industries.
Investment suggestion: environmental protection and public utilities: it is recommended to pay attention to China Power (2380. HK), Huaneng Power International Inc(600011) (600011. SH), China Resources Power (0836. HK), China Three Gorges Renewables (Group) Co.Ltd(600905) (600905. SH), Henan Bccy Environmental Energy Co.Ltd(300614) (300614. SZ), Beijing Geoenviron Engineering & Technology Inc(603588) (603588. SH), Zhefu Holding Group Co.Ltd(002266) (002266. SZ), Shandong Intco Recycling Resources Co.Ltd(688087) (688087. SH). Building materials: recommended Guangdong Kinlong Hardware Products Co.Ltd(002791) (002791. SZ), Beijing New Building Materials Public Limited Company(000786) (000786. SZ), Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) (002271. SZ), {300737. SZ), Zhejiang Weixing New Building Materials Co.Ltd(002372) (002372. SZ), Zhuzhou Kibing Group Co.Ltd(601636) (601636. SH), China Jushi Co.Ltd(600176) (600176. SH). Steel: recommended Baoshan Iron & Steel Co.Ltd(600019) (600019. SH), Hunan Valin Steel Co.Ltd(000932) (000932. SZ), Yongxing Special Materials Technology Co.Ltd(002756) (002756. SZ), Fushun Special Steel Co.Ltd(600399) (600399. SH), Citic Pacific Special Steel Group Co.Ltd(000708) (000708. SZ). Coal: recommended China Shenhua Energy Company Limited(601088) (601088. SH), Shaanxi Coal Industry Company Limited(601225) (601225. SH), Shanxi Coking Coal Energy Group Co.Ltd(000983) (000983. SZ), Shanxi Meijin Energy Co.Ltd(000723) (000723), Shan Xi Hua Yang Group New Energy Co.Ltd(600348) (600348).
Risk warning: the risk of sharp fluctuations in raw material prices; Risk that downstream demand is less than expected; Risk that the landing effect of production restriction is less than expected; The risk that the policy strength is less than expected; The risk that the new capacity of the industry exceeds the expectation; The risk of sharp decline in coal prices under the pressure of policy regulation.
